The American specialist in cryptocurrency, BlockFi, announced on Friday that it had agreed with the virtual currency exchange platform FTX providing the possibility that the latter could buy BlockFi for 240 million dollars.
BlockFi found itself in turmoil when a widespread drop in the value of cryptocurrencies recently tripped up several companies in the sector, explained its chief executive, Zac Prince, on Twitter.
The liquidation of the Singaporean investment company Three Arrows Capital, to which BlockFi had lent money, also caused a loss of $80 million for BlockFi.
In this environment, “it was important that we add capital to our balance sheet to strengthen our liquidity and protect our clients’ funds,” said Zac Prince.
The agreement signed with the American subsidiary of FTX provides, on the one hand, for opening a line of credit of 400 million dollars. It also provides for the possibility that FTX could outright buy BlockFi for up to $240 million, depending on the performance criteria.
The two companies could also collaborate on products or services, said Zac Prince. FTX co-founder and managing director Sam Bankman-Fried confirmed the news on Twitter, writing that he was “very happy to be working with BlockFi.’
The FTX US platform and products are highly complementary to BlockFi and we anticipate enhancements to our services through increased collaboration. Expect more exciting news to come on this soon.
— Zac Prince (@BlockFiZac) July 1, 2022
Its platform had already come to the rescue of BlockFi by granting it a $250 million line of credit on June 21